Thai shipping stocks experienced significant declines in the morning session on Wednesday subsequent to the United Nations Security Council backing a cease-fire initiative on Tuesday, which was subsequently acknowledged by Hamas on Wednesday.
Shares of Regional Container Lines Public Company Limited (SET: RCL) plummeted by 13.22% to THB26.25 per share, Thoresen Thai Agencies Public Company Limited (SET: TTA) saw a decrease of 3.80% to THB7.60 per share, and Precious Shipping Public Company Limited (SET: PSL) recorded a sharp decline of 11% to THB8.90 per share.
RCL, TTA and PSL were up 22.77%, 12.68% and 14.12%, respectively, this year prior to the announcement on Tuesday. The decline almost wiped out PSL’s gains so far this year.
The downturn followed the UN resolution, which also impacted the Baltic Dry Index, causing a 2.76% decrease. The Baltic Dry Index serves as a key indicator measuring the transportation costs for commodities such as coal and steel globally.
Freight forwarders were enjoying a rise in freight fees during the war in the Middle East up to this point, and a cease-fire resolution could derail their rallies.
On Tuesday, the United Nations Security Council granted overwhelming approval to its inaugural resolution endorsing a cease-fire initiative intended to put a halt to the eight-month conflict between Israel and Hamas in Gaza.
Sponsored by the United States, the resolution embraces a cease-fire proposition publicized by President Joe Biden, reportedly accepted by Israel. It urges Hamas, the militant Palestinian group, to acknowledge the three-phase plan.
The resolution, backed by 14 of the 15 Security Council members with Russia abstaining, urges Israel and Hamas to promptly and unconditionally carry out the terms outlined in the cease-fire plan.
While the willingness of Israel and Hamas to move forward with the proposal remains uncertain, the resolution’s significant backing in the UN’s influential body intensifies the pressure on both parties to endorse the initiative.
Following the approval on Tuesday, Hamas expressed a “positive” stance on Wednesday towards the US-proposed ceasefire plan for the ongoing eight-month conflict in the Gaza Strip, citing that it has created a promising pathway towards reaching an agreement. However, the situation remains uncertain as neither Hamas nor Israel has publicly committed to the deal.
On Tuesday, Hamas formally presented its response to the ceasefire proposal outlined by US President Joe Biden on May 31. While Israel deemed the response as a rejection, a Hamas official clarified that the Palestinian group had simply reiterated long-standing demands that were not addressed in the current plan.
